i always like to say there is a bull market somewhere, i promise to try to find it just for you here on "mad money." i'll see you tomorrow! larry, what are you looking at tonight? >> jimmy, america's second half. what was clint eastwood telling us last night in the super bowl? good evening, i'm larry kudlow. this is t"the kudlow report." today would have marked ronald reagan's 101st birthday. he was my hero, my mentor, and he knew how to grow the economy. however, our sizzle story tonight is morning in america, halftime in america. it may have been the best ad in last night's super bowl. watched by 111 million people. but it may have been the most controversial ad. >> showing us it can be done. and what's true about them is true about all of us. it's halftime, america. and our second is about to begin. >> all right. so it's clint eastwood, and a

vowed republican and liberty aaron who voted for john mccain and always voted for republican presidential candidates. he told the "l.a. times" last year he is opposed to bailing out banks and auto companies, but why did he seem like he was shilling for obama's bailout? or maybe it was just a larger statement that america is coming back in a kind of clint eastwood, rugged, conservative, cowboy, patriotic way? in a moment, we're going to debate the actual bailout with our dynamic duo robert reich and steve moore. but first i want to figure out what eastwood is telling us and how that figures into whether obama deserves a second term. we have david corn, washington bureau chief of "mother jones" magazine and romney supporter jim talent, a former republican senator from missouri. hello, gentlemen. david corn, some people are trying to make the case that eastwood was shilling for the obama bailouts. eastwood himself says not. he told fox news it was meant to be a message about job growth and the spirit of america.

that's all. he's always been against bailouts. he's always been in favor of free market capitalism. why is the left making such a big deal about this tonight? >> larry, you're doing it. it's a lead item on your show. i don't think the -- i don't think the left had a meeting. i think what -- i mean, the bottom line -- i watched this outknowing this ad was coming, like hurricanes hundreds of people of people around the globe, and i said huh, this may help obama, all because it's celebrating the comeback of detroit, which you guys can argue about that later, steve and bob. but clearly detroit is doing better now than it did under bush and largely because of obama's policies. you've got to give him the win on that. i think it was natural to make that connection, even if clint was doing this for a., the money and he liked the tough-sounding message of it and he wanted to play knute rockne for america. >> well, i like knute rockne for america. you know i'm a sucker for that. >> of course he is. >> look, clint eastwood is a

"make my day" kind of guy, a morning in america kind of guy. i'm saying his halftime message he's saying america's second half, meaning america's best days are ahead, to quote reagan on his 101st birthday today. is that a fair assessment, or are liberals making much too much of this? do you think for one minute clint eastwood was endorsing barack obama? >> well, i would be shocked if he was. look, i agree, america's best days are ahead. but only if we change our game plan during halftime, because we're not going to get there by increasing the size and scope and power of the federal government, which is what barack obama has done. that's why the economy's unemployment -- unemployment has been above 8%, three years in a low, the longest since the great depression. >> i want to add one more thing to this. i'm watching this clint eastwood ad and i'm liking it, let's get them, our best days still in front of us. but then comes the tag line at

the bottom, where it says, you know, this is chrysler fee at fiat. and i said, huh? what are they selling me? chrysler fiat was a bailout, i believe private equity firms should have taken it over in bankruptcy court and turned it around. i'm opposed to bailouts. that i didn't get. why do you think clint eastwood would do that kind of message for a countries leer fiat ad which does unfortunately, snarkly be supporting bailouts. >> i'm not sure if clint went through the whole political analysis of what he was doing. but i do think, listen, you may not like the bailout, but i don't think people can argue with the results. maybe a different policy would have given better results. but you had people like jim talent's friend mitt romney poo-pooing this thing. nevertheless, obama went ahead with this policy over all republicans' objections and it

seems to have kind of worked. you've got to admit, detroit is much better than it was, and chrysler is kind of anticipahap that. spent a lot of money on this ad to say we're coming back like america. >> david, what worked was when they went into a managed bankruptcy, which is what mitt romney proposed from the beginning, and common sense would have said they should have done. but in the meantime, they spent about 15 to $20 billion of taxpayers' money on policies that didn't work. >> let me play this -- >> it's nothing compared to what the bush administration did with t.a.r.p. and hundreds of billions of dollars. detroit is in a better place now. you can't deny that. >> it's in a better place, because they went into a managed bankruptcy, not because of the government involvement, although i guess we do have a lot of auto company stock now. >> i understand your position. barack obama can do no right. so if things went bad, it was his fault. if things go right, it's not his fault. >> i understand that. >> let me interrupt this for one second. hang on one second. i want to play this matt lauer clip, please. here is the president talking to matt lauer, just before the super bowl.

pay attention to the phrasing, the first few words. >> sure. >> i deserve a second term, but we're not done. we've made progress, and the key right now is just make sure that we don't start turning in a new direction that could throw that progress off. >> now, jim talent, with all due respect to president obama, he uses the word "i deserve a second term." that sounds like he's entitled. that sounds like one of those entitlement phrases. >> it's not what he said three years ago when he said it -- if this economy hasn't recovered by 2012, he doesn't deserve a second term. and it hasn't. as you know, larry, unemployment surged to 10% in the fall of 2009. and the only reason it's gone down since then, all of the reduction is due to people leaving the work force. in other words, not only are we not producing jobs, people are so discouraged about the prospect of us producing jobs, that they're -- that they're not even looking for work anymore, which to me does not sound like a very good report card. >> senator, what are the last jobs reports say? >> yeah, we had had one month -- >> what did the jobs report --

>> if you let me answer the question. >> what did the last jobs report say? >> let me answer the question, and i'll be happy to tell you. we had an increase in jobs of about 250,000. we have to increase 130,000, david, just to keep up with population growth. >> exactly. >> 5 million jobs -- we have 5 million jobs we have to make up. and you're proud of the fact that in one month, we had a net increase of about 100,000. >> well, i think it's a lot better than you saw under the bush/cheney years. you look at the chart, you see the recession and the job loss bottoming out, two or three months into the obama administration, because of what happened during the bush years, and then ever since then, it's been up. you can -- >> but i think, look -- i think the last couple months, jobs have picked up. but it is still one of the weakest recoveries on record. and i just want to throw this out. mr. obama says i deserve a second term. he's created $5 trillion of debt. he created obama care, which is

a tax and regulatory obstacle for businesses. he won't make the keystone pipeline run, which begs the question about his real motives for job creation. >> that's 2000 jobs. >> and he is launching a left wing populist attack against successful people and free market capitalism. now, we're going to debate all this. and the election is going to be fought over it. but those are not clear goals. those are not clear accomplishments. he doesn't deserve it. he's got to fight for those populist views, david corn. that's where i'm going on this. >> larry, you know that when he says deserve, he doesn't mean i'm entitled, because of my position. or anything. he is saying based on what he will argue are a series of accomplishments over the years. raising employment levels by 3.7 million, according to the cbo. you don't have to have me show for him. they have their whole case that you can bring on the white house people and they can do it. so this sort of phony attack that he feels entitled, no, i think he's going to make a strong case that he has a vision based on what he has done and

what he wants to do that is better than mitt romney's. and right now if you take a snapshot today, most of america agrees with that. although it's going to be a hard-fought contest between now and november. >> larry, i agree. i mean, the american people are going to make a judgment about whether they want unemployment to continue at these rates, and economic growth to be so more -- in a recovery like this, growth should have been double what it's been. and unemployment effectively has not gone down. and the only reason the rate has gone down is because people have stopped looking for work and the white house says today that's a good thing. >> but i think it's very important that you and governor romney and others who want to defeat obama, you've got to raise the issue of spending, deficits and debt. spending up to 247 gdp. the gross debt now is equal to the gdp. and the issue of free market capitalism and free enter surprise. i think, senator, that's a key point and where mr. obama is going to be his weakest. >> that is why we need a guy who spent his life in the private sector. and governor romney knows how to

create jobs. he understands and values the free market. >> go ahead, david. i'll give you the last word. >> i saw a clip that when he ran for governor, he claimed that he's created 10,000 jobs. now he claims he created 100,000 jobs. bing capital did not exist to create jobs, it create it was create to make money forever for the investors. >> i'm all for profits. >> sometimes it does, sometimes it doesn't. you know free enterprise doesn't always lead to more jobs. >> free enterprise -- i've got to go. >> it also gave us the crash of 2008. >> no, there's a debate about the role of government. david corn, thank you very much. senator jim, thank you very much. clint eastwood, thank you very much. since we have been talking about eastwood and the car bailouts, let's not forget. u.s. taxpayers are still three years later on the hook for $24 billion. we still own a big chunk of general motors, and gmac. and, oh, by the way, i hate to

say this, those chrysler cars? most of the new ones are being made in canada, as it turns out, not the usa. i frankly don't care. but some people do. let's debate the bailouts, bring in our dynamic duo. robert reich, former labor secretary, author of "aftershock" and steve moore, author of "return to prosperity." steve moore, an interesting point. detroit is coming back, but these cars are being made in ontario. that's the weird part. two or three out of the four chrysler models are being made in ontario or china or austria, not being made in detroit, steve. so there. >> well, that may explain why i just got back from detroit two weeks ago. anybody who thinks detroit is on a comeback, every other house in detroit is boarded up and in foreclosure. it's one of the most depressing places i've ever been. there is no comeback. the auto industry is making a comeback, but the city is in bad

shape. but please, robert reich, please, please, please tell me you are not going to make the case tonight for crony capitalism, for corporate welfare, for bailouts of big business. >> no, wait a minute, wait a minute. >> that's essentially what we did. >> i don't make that case. >> i'm praying you're in the in favor of that, because i believe, larry, the problem with this, every big business now, if we keep up this model, every big business that fails is going to get a handout from government. and i think that creates real moral hazard problems with the way businesses operate, and it hurts the small businesses that are the ones that are trying to, you know, charge up the hill and become king of the mountain. >> go ahead, robert. >> i was going to leave crony capitalism to my good friend steve moore and all of the military contracts and great agricultural price supports and other things we talk about here. steve, look. i think the chrysler bailout of 1979 and then the chrysler bailout again and the gm bailout, you can't argue with success. i mean, you know, ideal logically in terms of orthodoxy, i agree with you.

i don't think bailouts are a good thing, set up a very bad precedent. but the fact of the matter is, you've got a lot of jobs at stake, a lot of suppliers at stake, not just a broad but also in the united states, and there is this sense, and i think clint eastwood kind of illustrated it, of not -- maybe not mourning in america, but certainly do you think dawning in america. why do you have to rain on their parade? >> i am all for jobs in america. i want everything made in the usa, high-paying jobs in the united states. you cut me, i bleed red, white and blue. i simply think the idea of the government stepping in and taking on these big bailouts of these businesses -- by the way, when you said it was workers that were helped. let's be very specific about this. the reason the obama administration stepped in, it was union workers that were being helped, and don't forget, the people were really victimized by that government involvement, the people the bond holders who got shoved aside so that unions could keep their big fat union contracts. i just -- you talk a lot about

fairness on this show, bob. where was the fairness in that to the people who were first in line? >> you know, the thing is, it's not just bun holders versus -- you know, unionized workers. this was a win-win. it will be a win-win. we're moving in a direction that it will -- everybody will actually come out of this in a better situation than they would if -- certainly if gm and chrysler were liquidated and certainly if there were kind of a bankruptcy. you see, here's the problem. as a practical matter. >> what about -- ford? >> steve, i want to talk practicalities for a second. >> ford is making money, didn't get a bailout. >> actually, ford is at a competitive disadvantage. but let me just say this. when you have big consumer durables, and this is not a general principle about bailing out big companies, but it was clear, and you would know the automobile industry and all of the wednesday of suppliers. when that automobile industry is in trouble. and with the biggest automobile company in trouble, if you let it go down the tubes, then buyers, even if it's bankruptcy -- >> --

>> private equity deal could have done the same thing and more. without abrogating bond holder rights and without giving the union substantial -- >> and, larry, there is another factor. >> listen, we're still on the hook. let me just read this. taxpayers are still on the hook for $24 billion. we still own a quarter of general motors, and we still n own -- the taxpayer, that is, three quarters of gmac. now it's called ally. in other words, we are still very much in bailout city. this story oh is still going on. >> and i think the taxpayers are doing very well. >> here is the problem, job. the next time gm and chrysler get in trouble, where are they going to come, uncle sam. >> that's why i was against -- steve -- >> what we have done is institutionalized too big to fail. you're basically endorsing tonight is when companies get big, you want them to get a government handout. >> no, this is why i was against the wall street bailout. i think bailouts are bad.

and if there is going to be a bailout -- if there is going to be a bailout, the united states' taxpayer ought to get equity interest. we did that with gm. >> how do you know the taxpayer wants equity? the taxpayer would like to keep its own money. thank you very much. let me get out of here. our dynamic duo bob reich and steve moore. >> don't argue with success. >> after a multi-year high, the stocks did retreat a little bit today. greece struggles for an agreement on spending cuts necessary to ensure another round of rescue funds. i want to know, what's the direction stocks are going to go? we've had a great run-up. now i want to see whether that run-up can continue. and folks, this whole first segment, whether it's clint eastwood or ronald reagan, please don't forget, free market capitalism is still the best path to prosperity. reagan-eastwood would have made a pretty good ticket, actually. americans believe they should be in charge of their own future. how they'll live tomorrow.

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the three major averages have gained an impressive 20% or better since october. so i want to know, what direction is the market headed from here? we've got mike holland, chairman of holland and company, keith mcculla.

mike holland, angela merkel, late in the day, time is running out for greece. that's her statement. is time running out for our stock market mallo? >> i don't think so. it's interesting you started out with greece. if you go back to august and the word armageddon kept coming up because of greece, italy, the pigs, all of these things were going to take the whole world structure down if they didn't get it solved. today spain and italy bonds were actually trading at very good levels. showing none of the concern that some of the people were econvincing a short time ago. so ugly headlines, ugly politics. had to listen to the people you were just talking to recently, a few minutes ago. so all of the bad news is out there. it's all about valuation. that's the problem to get too bearish here, because prices are reflecting that fear. >> or, on the other hand, keith mcculla, just want to ask to be fair. is all of the good news priced

in. the european central banks' bailout, the better u.s. economy, the rising profits, the likelihood greece will get fixed and muddle through. it's all the good news in the market. >> the reality is what mike is talking about from a european flus flow perspective. that's yesterday's news. i think what matters going forward are inflation expectations rising because the dollar is starting to fall again. and in the face of inflation expectations, rising, i think much like last year, february to april, you saw a very marked growth slow down. and really, on the -- to the contrary to valuation being a catalyst, which i completely disagree with, i think as growth slows, stocks will stop going up. and i think that they might have 1.5 to 2% up side from here. >> which growth is going to slow, and which inflation expectations are rising? because i think the numbers coming out in january suggest a very good quarter, yet almost 3% in the fourth quarter. you could get the same in the first quarter, be a surprise. and secondly, keith, regarding

inflation and the dollar, the dollar is really stabilized pretty well here on the dxy index. >> well, in the last three weeks, actually, larry, today, you know, is a good example of what it's been doing, which is absolutely nothing. since the state of the union address and since ben bernanke, the dollar is down 3.2%. the price of oil is pushing up 5.5%. gold is up 7%. inflation expectations, commodity inflation, if you want to look at treasury inflation protection, which is another way to look at it, that's gone straight up. so that's what inflation expectations have done. and at the same time, growth expectations are following. and all you have to do is pull up a chart of the ten-year bond yield today. so today if you look at the market, the market is kind of flat to down. energy stocks are up 1.2%. that's inflation. and bonds, you know, had a big move to the up side, which is pricing and a slow down in growth. >> mike holland, tell me, you're an optimist on the market and you said many months ago stocks were ridiculously cheap, and you

were dead right. and i channeled your thought and still think you're going to be right. but i want to know this. what are you looking for? you've got investors out there, you've had this big fat rally. there is not a lot of long-term confidence in the market yet. that's still in front of us. what specifically are you looking at? where can you give advice to people, check this out, check that out, check this out? >> when we continue to follow the headlines, larry. keith, by the way, let me just say, keith mcculla is one of the smartest guys out there and articulated the negative case quite well, better than most. having said that, over the last couple years, we had enormous growth in profitability. record profitability. and, in fact, the valuation in the stock market went down. price earnings multiples actually went down. so you have stocks like google and apple at 10, 11 times earnings. this makes no sense. that's why i talked about stocks being ridiculously cheap. what i would tell people, to answer your question directly, if we get no armageddon, which it appears right now we may not get armageddon, if that happens,

let's go back to greece, jamie dimon said the effect on the banks in the u.s. would be nothing. i think if we don't get arm g armagedd armageddon, i think 11 and 12 times earnings for some of the world's great franchises, they have truly priced in all of the fear out there. >> all right. i'm going to leave it there, gentlemen. mike holland and keith mcculla. thanks for the update. next up, the american embassy in syria shut down. saber rattling between israel and iran heats up. are we going to see another military conflict in that region and might it blow up the whole financial markets? "the kudlow report" will be right back. (

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learn more at keller.edu. the american embassy in syria is shut down tonight, tightening the squeeze to push president assad out. and president obama tightening the screws on the government of iran and its central bank. the mayhem in the middle east could translate to mayhem in the markets, at least that's a fear. let's turn now to our distinguished guest, sa lima croft, political strategist of commodities research for barkley's capital. and dan sinor for middle eastern studies at the council on foreign relations. dan, you're furthest away. let me begin with you. i want to know if these syrian hostilities, 5,400 people have been killed. it's mass murder. we vacated the embassy. but we lost the u.n. security council vote. what happens next? is there a blow-up situation here that could affect world

markets? >> i think so, larry. things are deteriorating rapidly in syria. the russians and chinese show no support in efforts to intervene in some way. just in the last couple days, a couple hundred people killed. it looks like we're headed towards civil war. and i think the assad regime is fermenting civil war. the most critical objective for assad right now is to keep the minority on his side. and the only way he can do that, if he has them persuaded they're headed for civil war and the n sunn sunnis-against them. >> this is worse than libya. this looks uglier than libya, in terms of the death camp, and as dan just said, it's going get worse, a lot worse. i'll ask you the same question. is there going to be a blowout? how can the world community stand by and watch this

slaughter? >> i don't think the world community is really going to do anything right now in terms of a military intervention. that's what really changed the balance in libya. you had a massive nato bombing campaign, over six months. we don't see any appetite right now, even from the obama administration for military intervention. >> but the arab league wants to remove -- they want to remove assad. isn't that worth something? the united states in the security council was essentially offering the resolution to remove assad at the request of the arab league. >> well, certainly, that's important. but even the qataris, they're not actually calling for formal military intervention at this moment. and so you have a u.n. resolution that didn't go anywhere. you don't have any signs right now of formal military intervention. so i think it's ugly, it grinds on, and it's a nasty stalemate. >> but no blow-up. >> i think it's just going to get really ugly, potentially a civil war. >> as dan does. >> absolutely. >> dan, can secretary of state hillary clinton who sounds very strong on this issue, can she get a coalition of the willing? is can we go outside the united

nations the way her husband did in kosovo? >> i think it's going to be difficult in the near term. i want to say, it's a little bit of a straw man if the only option is military intervention. there are things we could be doing, the arab league, the gulf cooperation council is prepared to do in terms of funding the opposition, training the opposition. arming the opposition. so there are things we could be doing now, short of direct western military engagement like libya, which i agree, libya is not syria. libya in many respects, was much easier, more manageable than libya, homogeneous population, 90% of the population on the mediterranean. i think it's important to keep in mind that at this stage, we have to be asking the question, what if the resolution had passed? what if the u.n. security council resolution plan had -- resolution passed? what was the u.s. administration plans going forward? i was at the munich security conference, and they were pressed off the record, do you

have a plan? and they basically conveyed there is no plan, which is worrisome. >> all right. huh lima, closer to home, let's talk about iran. the u.s. is putting the clamps down now on the iranian central bank. we're going to take their assets if they're overseas. is there a blowup coming there? that's another question. >> that's the big story for the markets. obviously, the oil markets, there is no bigger story than iran right now. and i think what you want to be watching is, do you have the israelis considering preemptive military strike on the iranian facilities? that's what the markets -- >> are they? how would you handicap that? >> i think they're talking more about it, and i think there is a concern now when they talk about the sort of red lines about the secret enrichment sites. i think there is a fear thesis reallies may be serious this time. >> and why are oil markets so quiescent so far? >> oil has been up on the iran story. we haven't seen anything really change significantly in the last six weeks. we just get more iranian bluster, more stories about a possible israeli strike. but everyone is on the edge right now. they're waiting to see how this

unfolds. it's the big story. >> dan, i'll geoive you the las word. everyone is on the knife's edge. is the united states on the knife's edge? are sanctions going to work, and what is the role of israel, in your judgment? >> i think, larry, at this point, we're past the point at which sanctions can work. the iranians are racing to get a bomb. they have seen lessons from other countries like north korea, that if you have the bomb, you get basically protection. you're vulnerable. much like libya learned the wrong way, gadhafi gave up his weapons program and wasn't able to survive. i think they're racing towards it. i think the israelis are on a different clock than the americans. the israelis believe there is a much tighter window here, at which point there is a point of no return. the americans are trying to calm the israelis down, which is partly what you saw today. the central bank sanctions was mostly a message to israel. we are working on this. but the israelis, i think, with great, you know, reason and great rationality, are skeptical they'll have much effect. >> all right. we're going to follow this story closely. thanks to both of you. we will have you back.

halema croft and dan senor. obama has momentum and is being backed by conservatives. what's going to happen tomorrow? we have colorado, missouri and minnesota. it could blow up santorum and gingrich. we'll see what our distinguished panel coming up next on kudlow. this new at&t 4g lte is fast.

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welcome back to the kudlow report. coming out of nevada, mitt has momentum and winning support among conservatives. tomorrow we have colorado, missouri and minnesota. question is, what's it going to mean for santorum and gingrich. let's bring in our distinguished panel. cnbc contributor keith boykin, a former clinton white house aide. we have michael steele, former republican national committee chair. and rick lazio from new york. michael steele, tomorrow's results, i know they may not be as marquis as some of the more recent ones, but they could really cook -- romney could cook santorum and gingrich right out of this thing if he sweeps. >> no, not really. >> yeah, really. >> no, not really. because a., these are -- these

are caucuses, so there is a very different dynamic than if they were primaries. b., i think that as you will see, for example, rick -- my buddy, rick, i saw him there, that rick santorum will have an opportunity to maybe shake things up in one or two of these caucuses during this stretch over the month of february. three, i think gingrich has made it very clear. it doesn't really matter what happens tomorrow or the next day. he's planning to take this thing as long as and as far as he can. >> sure. i know what he said. i know what dick army said. i want to get your reaction to dick army. dick army said that gingrich is running a second-rate campaign that has now degenerated into a vendetta. now the question is how long will he be financed by sheldon aidleson. that could cook gingrich's goose. >> but you're assuming that he's only getting money just from mr. aid he willson. i don't believe that is the

case. be that as it may, the fact of the matter is, the way this primary has been structured, you know, guys like gingrich and santorum and ron paul have a lot more edge than they probably would have under the older system. and i'm just saying, you know, don't start counting those chickens before they hatch. >> all right. well, fair enough. you know more about it than i do. i'll bring in rick lasio. what is the great michael steele missing here? because romney has mo and conservative mo. if he sweeps tomorrow, what is michael steele missing? >> i think first of all, larry you're absolutely right. romney's win in nevada and florida, he won almost across the board. economic conservatives, social conservatives, self-described tea party people, moderates. he is bringing it home and honing his message and delivering. and that's why he's had these huge margins of victory. in the places where delegates are actually being awarded. i wasn't emif a seize these three too much tomorrow because there are no delegates being

awarded. they're largely beauty contests, and romney and the campaign are very disciplined this year. they're they're spending time and money and resources where they can bring delegates home. so look for the big payoff in places like super tuesday and primary states. >> keith boykin, on the other hand, to be fair and balanced, mr. romney has had a couple major league gaffes. one he's not worried about poor people. he's for the safety net. he would agree with you, and he would probably agree with president obama. but not conservatives. and the second one is, he wants to raise the minimum wage by indexing it for inflation. you might agree with that. but most economists believe that would cause higher teenage and african-american unemployment. so what does romney do with these gaffes, keith boykin? >> romney has a strategic problem. he's got to appeal to the base to win the conservatives. i don't agree with you, larry, i don't think he has locked up the conservative base. the polls show the majority of conservatives don't support him. overwhelming majority of conservatives don't support him. in order to do that, he's got to continue to pander to the right.

i think that's going to hurt him going down and setting up for the general election. i think this is good news for president obama. even if romney somehow wins all the states in february, which i think is probably unlikely, but it's possible, that doesn't necessarily help him, because people are expecting him to win. the expectations are so high, and nobody is paying attention right now. >> what if he meets those expectations, michael steele? i know you're right about the delegate count coming up in these next couple tomorrow. but i think the newspapers are angling this. the mainstream media is about to award it to mitt romney. whether that's right or wrong, that's the way it's reading to me. >> sure, no. larry, on that point, you're absolutely right. that's the narrative that a lot in the press want to further, and certainly they are looking forward to a battle between obama and mitt romney. but all i'm saying is that there are enough caution flags along the way. remember, yes, i think rick laid it out very clearly, what mitt romney won between florida and nevada. but the reality of it is, you

still had in each of those cases a significant number of conservatives who have not lined up behind him and he still has to make the case to the base. super tuesday, which is going to be a whole lot of southern states, is going to be a huge we' beach hit for him. and right now the angle is for newt and for santorum to do well. >> i think newt is going to have trouble surviving. but i could be dead wrong. keith boykin, thank you. michael steele, rick lasio, appreciate it. now, folks, talk about ridiculous. animal activists clog up the federal court system, and our tax dollars, by suing to get five sea world whales freed. wait until you hear what their constitutional argument is. that and other business headlines coming up next. i've been riding since i was 17.

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we're getting much more insight into why so much money disappeared from jon corzine's mf global. cnbc's mary thompson has that and all of the latest breaking headlines coming into the cnbc newsroom. good evening, mary. >> good evening, larry. the trustee of the mf global bankruptcy says he has traced most of the $105 billion that went in and out of the country

before it filed for bankruptcy. still not noerngs the whereabouts of 1.2 billion missing customer funds. he adds client accounts were overdrawn a day earlier than thought, but a reporting error kept telling personnel there was more than enough money in the accounts. the question now, can any of the money be clawed back or gone for good? new regulations on fracing are set to be announced. brian shactman has more. good evening, brian. >> reporter: as president obama set the tone, the pressure on the key drilling called fracing continues to intensify and we are a couple weeks away from finding out federal rules on fracing on public land. pennsylvania, by the way, which has the gas-rich marcellus shale, now considering a tax on drillers, and there are counties in virginia rejecting permits. and in canada, a poll said 62% want a moratorium on fracing. as you'll find out tonight on cnbc's "america's oil rush boom or bust" if that happened in north dakota, the oil well would

go dry virtually overnight. you can see how likely that is to happen, and you can see for yourself if the north dakota oil shale should be lumped in with the gas fracing projects across the country. back to you. >> thanks, brian. people for the ethical treatment of animals argued in san dag's federal court the 13th amendment gives five whales the same protection against slavery as it gives humans. finally tonight, the numbers in, 111.3 million people watched the super bowl last night, making it the most watched in history. tomorrow the area around wall street will welcome the new york giants in a ticker tape parade along the canyon of heroes. some 200 fans welcomed the patriots back to gillette field today. larry, back to you. >> all right, mary, thank you very much. cnbc's mary thompson. next on kudlow, the most important nonpresidential election coming up in this country. should this courageous governor be tossed out of office for taking a constant against government worker unions or will he be the first governor

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a union-led recall effort against wisconsin republican governor scott walker has been called the most important nonpresidential election of the year. it all stemmed from opposition to republican efforts in wisconsin to limit collective bargaining rights by most public unions. but if the governor loses, the state recall could have much bigger implications. could embolden public unions to flex their muscles nationwide. so joining us exclusively is wisconsin governor scott walker. governor, thank you very much. so let me just get this. everybody is up in arms over there. the unions are up in arms. what exactly -- what's the bottom line? you've reformed collective bargaining. the teachers and the unions have to pay in more for their pensions, and their health care. has this damaged the wisconsin economy? have thousands of businesses moved out? has the unemployment rate jumped sky-high? >> no. actually, larry, the opposite happened. our unemployment's down from a year ago. in fact, after losing 150,000 jobs in the three years before i took office, we gained thousands

of new jobs. unemployment rates are down from a year ago, the lowest since 2008. and we've had thousands of new jobs. we balanced a $3.6 billion budget deficit. and we did it without raising taxes. we did it without massive public employee laughs and we did it without budget gimmicks. we kept our promises. >> i thought these would be good things, not bad things. and i mean, this is because, what, teachers have to pay more into their pensions, and everybody has to pay more into their health care benefits? is that really the bottom line here also? >> well, that's part of the discussion. we had all of our public employees in the state now have an opportunity to match their pension contribution and to pay a mere 12.6% for their health insurance. that's still much less than about 20% -- almost 25% that the average middle class taxpayer pays in our state. but really at stake, the reason why you see the literally tens of millions of dollars that the big government union bosses from washington are spending here is isn't because of that. it's not because of collective

bargaining. it's ultimately because i gave every worker, every public employee at the local and state level the right to choose. and that means they could be a part of a union or don't have to be and no longer can have dues forcibly taken out of their paycheck. that's really what's at stake. >> this is the paycheck protection. and just one more time. so people understand. you're saying the individuals can pay in if they choose to, but they are not forced to pay in. >> that's exactly right. i have nearly 300,000 public servants, the good decent men and women of our state who work in our local and state government. and now they get to choose whether or not they want to be the ultimate form of pro worker, pro freedom concept. they get to choose, and they can't have those dues automatically deducted. i think in the end that's what this is about. for us, it was about balancing our budget and avoiding tax increases we saw in places like illinois, avoiding the massive layoffs in places like connecticut. avoiding budget gimmicks like wisconsin did in the past. we thought more about the next generation than ultimately about the next election. and again, that's what people

elected us to do. >> so, wait, you're making the case that your reforms have actually reduced public employee layoffs. is that what i'm hearing? >> absolutely. you look at other states that literally saw tens of thousands of layoffs in the public sector. we avoided those may massive layoffs, improved the economy, kept people in place. and ultimately, we improved our schools and local governments, as well. i've got two kids in the public schools here in the state of wisconsin. most schools in the state say schools are the same. most taxpayers in december saw their property tax bills stay the same or go down. all the things we said we would accomplish when i ran for governor, we have been doing. and, again, the irony of ironies, there is a small vocal group out there trying to force a recall election. most people scratch their head across america and think, you kept all your promises, you did what you said you were going to do, you made the tough decisions to make sure that our kids and grandkids were in a better position and yet we face a recall. >> who is running this recall? which unions are running this

recall? >> it's the big governments, afscme, afl-cio, nea. a lot of the trades, a lot of the people like the operating engineers and others out there understand that in the private sector, we're making it easier for their workers to go back to work. i want to make it clear, it's the public sector, big government union bosses fighting us, not the private sector unions. they understand, we're putting their people back to work. that's the contrast. that's why my hope is people can come and join us at scottwalker.org and help us get our message out there. because to counter that big money coming from washington, we need help from people here not only in wisconsin but across the country and i think grass roots can make the difference. >> are you disbanding the government unions? i see that charge all the time in the papers. >> not at all. i mean, the bottom line is, if public employees want to be a part of a union, they have every right to do that. they can vote each year to ultimately put that into place. and they can choose to be a part of it. they just don't ever have to be forced to be a part of a union here in the state of wisconsin. that puts the power back in the

side of the taxpayers who for far too often, the middle class taxpayers in the state and country have been left out in the cold. we bring them back to the table. >> but you're going to hold their wages down to the inflation rate, is that correct? in other words -- you -- they can't run above the cost of living? >> we eliminated all forms of collective bargaining, except for base salary, and we capped that at the cpi, saying you can have more if the economy grows. we all share in that success. you can negotiate for more if it doesn't. if it's a time like the last couple years, we're not going to see tax increases and rate increases or pay income increases. but the bottom line is, for all too long, the middle class taxpayers in our state have paid for the expanse of government. this puts them back in charge again at both the state and local level. >> just in the last minute or so, what's this all mean to the national election? what's this mean to the presidential election, in your eyes? >> well, i think it has an impact both in november of 2012 and in the future. clearly, wisconsin, a swing state, will have an impact on

what happens in my race, it will have an impact on the presidential election. it will have an impact on the united states' senate, one of those key seats is open here in the state of wisconsin. and probably on whether or not republicans hold the majority in the house, because two of those key seats are right here in wisconsin. more importantly than that, beyond 2013 into the future, i think when we win, when we prevail with the help of the grass roots, we'll send a powerful message in every state house, not just ours, but every state house and in the halls of congress. if you're courageous, if you do the right thing, if you stand up and do what the people of this country and state certainly know we need to do, there will be people standing with you. and i think that will inspire courage elsewhere. or at least i hope it will. >> but if you want to hold down taxes, ordinary middle income people, you're going to have to put limits on government, are you not? you're going to have to put limits on government benefits. i don't see that being done yet in washington regarding medicare and social security. but isn't that part of your message? otherwise tax rates blow sky-high, last 25 seconds. >> i absolutely agree. the bottom line is it's either higher taxes or it's devastating

problems in the future for our kids. i don't think -- i think people realize more taxes will kill the economy like it's done in illinois and i think about my kids and someday my grandkids and i certainly don't want them toin herrit the problems we faced. i want them to inherit a better wisconsin and america. >> many thanks. wisconsin governor scott walker. all the best out there. that's it for this evening's show. thanks for watching. i'm larry kudlow. we'll have much more tomorrow night. please join us then. [ female announcer ] these are the crescents you love on a holiday. and these are the ones you'll love on a school night. pillsbury ham and cheese crescents. with just a few ingredients, you have an easy dinner. pillsbury ham and cheese crescents. school night ideas made easy. without the stuff that we make here, you wouldn't be able to walk in your house and flip on your lights.

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